Exhibit 99.1
INDEPENDENT
BANK CORP.
Parent of Rockland Trust Company
| | | |
Stockholder Relations | | NEWS RELEASE |
|
| 288 Union Street, Rockland, MA 02370 | | Contact: |
Chris Oddleifson
President and
Chief Executive Officer
(781) 982-6660
Denis K. Sheahan
Chief Financial Officer
(781) 982-6341
INDEPENDENT BANK CORP. ANNOUNCES SECOND QUARTER 2004 RESULTS
Rockland, Massachusetts (July 15, 2004). Independent Bank Corp., (NASDAQ: INDB), parent of Rockland Trust Company, today announced that net income for the quarter ended June 30, 2004 was $6.6 million and that diluted earnings per share for the quarter were $0.45. For the six months ended June 30, 2004, net income was $13.3 million and diluted earnings per share were $0.90. The Company had strong growth across its balance sheet during the first half of 2004, with total assets increasing by $242.4 million to $2.7 billion, a 10.0% increase from year-end 2003, and total deposits increasing by $204.0 million to $2.0 billion at June 30, 2004, an 11.4% increase from December 31, 2003.
Comparing the second quarter of 2004 to the same period last year, net interest income decreased $1.3 million, or (5.3%), while net interest income for the six months ended June 30, 2004 decreased $1.6 million, or (3.3%) from the six months ended June 30, 2003. The net interest margin for the three and six month periods ended June 30, 2004 was 3.84% and 3.99%, respectively, as compared to 4.47% and 4.49%, for the comparable periods last year.
The Company’s adoption of a new accounting standard on March 31, 2004 caused certain expenses to be reclassified to interest expense prospectively and contribute, on an annualized basis, approximately 19 basis points to the compression of the net interest margin when compared to reported net interest margin calculations prior to the second quarter of 2004.(See note below pertaining to FIN46R).The remainder of the net interest margin compression is a consequence of the prolonged low interest rate environment, coupled with what the Company believes to be the prudent management of its balance sheet in anticipation of rising interest rates. During this historically low
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interest rate environment, the Company has emphasized adjustable rate lending and extended the duration of its borrowings. While these measures, along with the use of promotional pricing for certain retail deposit products, have somewhat exacerbated the margin compression and decreased near-term earnings, Management believes that these measures will result in long-term franchise value. The Company’s continued ability to generate loan growth has somewhat offset the compression of the net interest margin.
Non-interest income declined by $1.8 million, or (22.1)%, and by $659,000, or (4.6)%, during the three and six months ended June 30, 2004, respectively, as compared to the same periods in the prior year. Net security gains decreased by $2.0 million and by $1.2 million for the three months and six months ended June 30, 2004, respectively, as compared to the same periods in 2003. Net security gains of $2.0 million were recorded in the second quarter of 2003 on the sale of $20 million of investment securities as part of a strategy to improve the Company’s overall interest rate risk position and increase the net interest margin. That strategy included prepaying $31.5 million of fixed high rate borrowings.
Service charges on deposit accounts increased by $194,000, or 6.8%, and by $441,000, or 8.0%, for the three and six months ended June 30, 2004, respectively, as compared to the same periods in 2003, reflecting growth in core deposits. Investment management services income increased $28,000, or 2.3%, and by $107,000, or 4.8%, for the three and six months ended June 30, 2004, respectively, compared to the same periods last year. Mortgage banking income decreased by $119,000, or (12.2)%, and $442,000, or (21.7)%, for the three and six months ended June 30, 2004 as compared to the three and six months ended June 30, 2003, respectively, due to the decline in the refinancing market. The balance of the mortgage servicing asset is $3.2 million and loans serviced amounted to $363.6 million as of June 30, 2004. Other non-interest income increased $401,000, or 27.4%, for the six months ended June 30, 2004 as compared to the same period in 2003 primarily due to prepayment penalties received on loan payoffs during the first quarter of 2004.
Non-interest expense decreased by $1.1 million, or (5.5)%, and $216,000, or (0.6)%, for the three and six months ended June 30, 2004, respectively, as compared to the same periods in the prior year. A $1.9 million prepayment penalty incurred during the quarter ended June 30, 2003 as part of the balance sheet repositioning strategy discussed above is a significant factor in the period to period expense reduction. Salaries and employee benefits decreased by $270,000, or (2.6)%, and increased $327,000, or 1.6%, for the three and six months ended June 30, 2004, respectively, as compared to the same periods in the prior year. The primary factor in the reduction of salaries and benefits expenses in the quarter was lower performance based incentive compensation accruals. As previously disclosed, the Company anticipates an increased pension expense for its defined benefit plan during 2004. During the quarter the Company suspended matching contributions to the 401(k) plan maintained for employees to partially offset the increased pension expense. Occupancy and equipment related expense decreased by $50,000, or (2.2)%, and $168,000, or (3.6)%, for the three and six months ended June 30, 2004, respectively, compared to the same periods in the prior year, as a result of improved building maintenance costs.
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Other non-interest expenses increased by $927,000, or 21.0%, and $1.3 million, or 15.5%, for the three and six months ended June 30, 2004, respectively, as compared to the same periods in the prior year. The increase in other non-interest expenses is primarily attributable to increased expenditures for the Company’s key business initiatives. During the first half of 2004, the Company incurred business initiative expenses to implement a small business banking model, to expand residential lending, to develop a new set of consumer deposit products, to improve the commercial loan process, to fund retail sales training, and to fund a core information system selection process. The Company estimates that the total expenses associated with its business initiatives were approximately $606,000 and $1.1 million for the three and six months ended June 30, 2004, respectively, across all expense categories. In addition, advertising and business development increased incrementally by $314,000 and $515,000 for the three and six months ended June 30, 2004, respectively, as compared to the same periods in the prior year, to support the afore-mentioned business initiatives and capitalize on market changes due to merger disruption.
Total assets increased by $242.4 million, or 10.0%, from year-end 2003 to $2.7 billion at June 30, 2004. Investments increased by $119.7 million, or 17.8%, during the six months ended June 30, 2004. Management allowed the investment portfolio as a percentage of assets to decline during the low rate environment of 2003. As the yield curve began to shift upward during 2004, Management has grown the investment portfolio to more historical levels. Total loans increased by $115.2 million, or 7.3%, during 2004. The increases were mainly in consumer loans, which increased $62.8 million, or 14.5%, primarily due to an increase in indirect auto loans and home equity lines, as well as increases in residential real estate and commercial construction, which increased $32.6 million, or 10.1%, and $24.2 million, or 32.1%, respectively. Commercial real estate decreased by $4.4 million, or (0.8%), primarily due to prepayment activity during 2004.
Total deposits of $2.0 billion at June 30, 2004 increased $204.0 million, or 11.4%, compared to December 31, 2003. The increase is attributable to the early success of the roll out of a set of consumer deposit products, increases in municipal deposits as a result of disruption in the local banking market and a successful business banking promotional campaign. Borrowings increased by $86.2 million, or 20.8%, during the six months ended June 30, 2004. Approximately $51.5 million of the increase in borrowings was due to the Company’s adoption of Financial Accounting Standards Board (“FASB”) Interpretation (“FIN”) No. 46 Revised, entitled “Consolidation of Variable Interest Entities – an Interpretation of Accounting Research Bulletin No. 51” or “FIN 46R” on March 31, 2004 (See FIN 46R discussion below). Adoption of the new accounting standard effectively reclassifies the Company’s Trust Preferred Securities from the mezzanine section of its balance sheet to debt, where it is shown as Junior Subordinated Debentures. While the adoption of FIN 46R does not impact net income, it does reduce the net interest margin by approximately 0.19% on an annualized basis. Prior periods have not been restated.
Stockholders’ equity as of June 30, 2004 totaled $175.4 million, as compared to $171.8 million at December 31, 2003. The Tier 1 leverage capital ratio at June 30, 2004 was 7.45%, maintaining the Company’s well-capitalized position.
Non-performing assets totaled $3.3 million at June 30, 2004 (0.12% of total assets), as compared to $3.5 million (0.14% of total assets) reported at December 31,
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2003. The provision for loan losses decreased to $744,000 in the second quarter of 2004, compared to $930,000 in the same period in 2003, reflecting the Company’s continued strong asset quality and the prospects of an improving economy. The Company’s allowance for loan losses, as a percentage of non-performing loans, was 715.21% at June 30, 2004 and 659.16% at December 31, 2003.
Overall period to period comparisons between the first half of 2004 and the first six months of 2003 are skewed significantly by the Company’s previously disclosed initial charge for, and subsequent settlement of, a tax dispute with the Massachusetts Department of Revenue (“DOR”) in 2003. The Company recognized a $2.1 million credit to its provision for income taxes in the quarter ended June 30, 2003 due to its settlement with the DOR. That settlement reduced the $4.1 million charge initially recorded to the Company’s provision for income taxes in the quarter ended March 31, 2003 to $2.0 million. Due, in large part, to the affect of the credits and charges associated with the DOR tax dispute during 2003: the $6.6 million which the Company recorded in net income for the quarter ended June 30, 2004 was a $2.6 million, or 27.8%, decrease in net income from the quarter ended June 30, 2003; and, for the six months ended June 30, 2004, the Company’s recorded net income of $13.3 million reflected a 14.8% increase from the same six month period in 2003.
As previously announced, Independent Bank Corp. has entered into a definitive agreement to acquire Falmouth Bancorp, Inc., and it is anticipated that the closing of that transaction will occur tomorrow, July 16, 2004. During the quarter ended June 30, 2004 the Company incurred approximately $221,000, or $0.01 per share, of expenses related to the Falmouth Bancorp acquisition, including expenses associated with branch closings, marketing, and systems-related charges. Management anticipates that the Falmouth transaction will be accretive to earnings in the latter half of 2004.
During the second quarter of 2004, the Company announced that one of its subsidiaries had been awarded $30 million in tax credit allocation authority under the New Markets Tax Credit Program of the United States Department of Treasury. The award will enable Rockland Trust Company to provide increased assistance to qualified businesses in low-income communities throughout its market area. Management anticipates that the tax credits, which will be recognized over a seven-year period, will be accretive to earnings. Management will discuss the impact of the tax credit award on 2004 earnings and beyond later this year as implementation of the award is finalized.
Chris Oddleifson, Chief Executive Officer and President of Independent Bank Corp. and Rockland Trust Company, stated that: “I am pleased with the quarter’s financial results. I am enthusiastic about the prospects for earnings growth during the second half of 2004 when the effects of our investments in key business initiatives, and the integration of Falmouth Bancorp, will begin to be felt.”
FIN 46R: Financial Accounting Standards Board (“FASB”) Interpretation (“FIN”) No. 46 Revised, “Consolidation of Variable Interest Entities – an Interpretation of Accounting Research Bulletin No. 51”.FIN 46R addresses limited purpose trusts formed to issue trust preferred securities. FIN 46R required the Company to deconsolidate its two subsidiary trusts (Independent Capital Trust III and Independent Capital Trust IV) on March 31, 2004. The result of deconsolidating these subsidiary trusts is that trust preferred securities of the trusts, which were classified between liabilities and equity on the balance sheet (mezzanine section), will no longer appear on
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the consolidated balance sheet of the Company. The related minority interest expense also will no longer be included in the consolidated statement of income. Due to FIN 46R, the junior subordinated debentures of the parent company that were previously eliminated in consolidation will now be included on the consolidated balance sheet within total borrowings. The interest expense on the junior subordinated debentures will be included in the net interest margin of the consolidated company, negatively impacting the net interest margin by approximately 0.19% on an annualized basis. There is no impact to net income as the amount of interest previously recognized as minority interest is equal to the amount of interest expense that will be recognized currently in the net interest margin offset by the dividend income on the subsidiary trusts common stock recognized in other non-interest income.
Christopher Oddleifson, Chief Executive Officer and President, and Denis K. Sheahan, Chief Financial Officer, of Independent Bank Corp., will host a conference call to discuss second quarter earnings at 10:00 a.m. Eastern Time on Friday, July 16, 2004. Internet access to the call is available on the Company’s website athttp://www.RocklandTrust.com or by telephonic access by dial-in at 1-877-407-8031 reference: INDB. A replay of the call will be available until 11:59 p.m. on July 20, 2004 by calling 1-877-660-6853 Account Number: 1628, Conference ID: 110419.
Independent Bank Corp.’s sole bank subsidiary, Rockland Trust Company, currently has $2.7 billion in assets, 52 retail branches, seven Commercial Lending Centers, three Investment Management offices and three Residential Lending Centers located throughout southeastern Massachusetts and Cape Cod. For more information visit our website atwww.RocklandTrust.com.
This press release contains certain “forward-looking statements” with respect to the financial condition, results of operations and business of the Company. Actual results may differ from those contemplated by these statements. The Company wishes to caution readers not to place undue reliance on any forward-looking statements. The Company disclaims any intent or obligation to update publicly any such forward-looking statements, whether in response to new information, future events or otherwise.
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INDEPENDENT BANK CORP. FINANCIAL SUMMARY
(Unaudited — Dollars in Thousands)
CONSOLIDATED BALANCE SHEETS
| | | | | | | | | | | | | |
| | | June 30, | | December 31, | | Percent |
| | | 2004
| | 2003
| | Change
|
Assets | | | | | | | | | | | | |
| Cash and Due From Banks | | $ | 70,807 | | | $ | 75,495 | | | | -6.21 | % |
| Investments | | | | | | | | | | | | |
| Trading Assets | | | 1,500 | | | | 1,171 | | | | 28.10 | % |
| Investments Available for Sale | | | 653,452 | | | | 527,507 | | | | 23.88 | % |
| Investments Held to Maturity | | | 114,799 | | | | 121,894 | | | | -5.82 | % |
| Federal Home Loan Bank Stock | | | 22,432 | | | | 21,907 | | | | 2.40 | % |
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| |
| Total Investments | | | 792,183 | | | | 672,479 | | | | 17.80 | % |
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| Loans | | | | | | | | | | | | |
| Commercial & Industrial | | | 171,816 | | | | 171,230 | | | | 0.34 | % |
| Commercial Real Estate | | | 560,476 | | | | 564,890 | | | | -0.78 | % |
| Residential Real Estate | | | 356,607 | | | | 324,052 | | | | 10.05 | % |
| Residential Loans Held for Sale | | | 1,904 | | | | 1,471 | | | | 29.44 | % |
| Commercial Construction | | | 99,606 | | | | 75,380 | | | | 32.14 | % |
| Residential Construction | | | 8,672 | | | | 9,633 | | | | -9.98 | % |
| Consumer — Installment | | | 341,047 | | | | 301,801 | | | | 13.00 | % |
| Consumer — Other | | | 156,253 | | | | 132,678 | | | | 17.77 | % |
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| Total Loans | | | 1,696,381 | | | | 1,581,135 | | | | 7.29 | % |
| Less — Allowance for Loan Losses | | | (23,931 | ) | | | (23,163 | ) | | | 3.32 | % |
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| |
| Net Loans | | | 1,672,450 | | | | 1,557,972 | | | | 7.35 | % |
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| Bank Premises and Equipment | | | 33,137 | | | | 32,477 | | | | 2.03 | % |
| Goodwill | | | 36,236 | | | | 36,236 | | | | 0.00 | % |
| Other Assets | | | 74,292 | | | | 62,096 | | | | 19.64 | % |
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| |
| Total Assets | | $ | 2,679,105 | | | $ | 2,436,755 | | | | 9.95 | % |
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Liabilities and Stockholders’ Equity | | | | | | | | | | | | |
| Deposits | | | | | | | | | | | | |
| Demand Deposits | | $ | 475,399 | | | $ | 448,452 | | | | 6.01 | % |
| Savings and Interest Checking Accounts | | | 569,992 | | | | 535,870 | | | | 6.37 | % |
| Money Market and Super Interest Checking Accounts | | | 475,690 | | | | 347,530 | | | | 36.88 | % |
| Time Certificates of Deposit | | | 466,258 | | | | 451,486 | | | | 3.27 | % |
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| Total Deposits | | | 1,987,339 | | | | 1,783,338 | | | | 11.44 | % |
| Fed Funds Purchased and Assets Sold Under Repurchase Agreements | | | 50,422 | | | | 39,425 | | | | 27.89 | % |
| Federal Home Loan Bank Borrowings | | | 396,734 | | | | 371,136 | | | | 6.90 | % |
| Treasury Tax and Loan Notes | | | 2,838 | | | | 4,808 | | | | -40.97 | % |
| Junior Subordinated Debentures | | | 51,546 | | | | — | | | | 100.00 | % |
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| Total Borrowings | | | 501,540 | | | | 415,369 | | | | 20.75 | % |
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| |
| Total Deposits and Borrowings | | | 2,488,879 | | | | 2,198,707 | | | | 13.20 | % |
| Other Liabilities | | | 14,858 | | | | 18,344 | | | | -19.00 | % |
| Company-Obligated Mandatory Redeemable Securities of Subsidiary Holding Solely Parent Company Debenture of the Corporation | | | — | | | | 47,857 | | | | -100.00 | % |
| Stockholders’ Equity | | | 175,368 | | | | 171,847 | | | | 2.05 | % |
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| Total Liabilities and Stockholders’ Equity | | $ | 2,679,105 | | | $ | 2,436,755 | | | | 9.95 | % |
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INDEPENDENT BANK CORP. FINANCIAL SUMMARY
(Unaudited — Dollars in Thousands)
CONSOLIDATED STATEMENTS OF INCOME
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended
| | Six Months Ended
|
| | | June 30,
| | Percent | | June 30,
| | Percent |
| | | 2004
| | 2003
| | Change
| | 2004
| | 2003
| | Change
|
INTEREST INCOME | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest and Dividends on Securities | | $ | 8,602 | | | $ | 8,563 | | | | 0.46 | % | | $ | 16,397 | | | $ | 16,927 | | | | -3.13 | % |
| Interest on Loans | | | 23,540 | | | | 24,146 | | | | -2.51 | % | | | 46,819 | | | | 48,145 | | | | -2.75 | % |
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| |
| Total Interest Income | | | 32,142 | | | | 32,709 | | | | -1.73 | % | | | 63,216 | | | | 65,072 | | | | -2.85 | % |
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INTEREST EXPENSE | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest on Deposits | | | 4,589 | | | | 4,449 | | | | 3.15 | % | | | 8,886 | | | | 9,159 | | | | -2.98 | % |
| Interest on Borrowed Funds | | | 4,584 | | | | 3,995 | | | | 14.74 | % | | | 7,927 | | | | 7,946 | | | | -0.24 | % |
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| Total Interest Expense | | | 9,173 | | | | 8,444 | | | | 8.63 | % | | | 16,813 | | | | 17,105 | | | | -1.71 | % |
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| Net Interest Income | | | 22,969 | | | | 24,265 | | | | -5.34 | % | | | 46,403 | | | | 47,967 | | | | -3.26 | % |
| Less — Provision for Loan Losses | | | 744 | | | | 930 | | | | -20.00 | % | | | 1,488 | | | | 1,860 | | | | -20.00 | % |
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| Net Interest Income after Provision for Loan Losses | | | 22,225 | | | | 23,335 | | | | -4.76 | % | | | 44,915 | | | | 46,107 | | | | -2.59 | % |
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NON-INTEREST INCOME | | | | | | | | | | | | | | | | | | | | | | | | |
| Service Charges on Deposit Accounts | | | 3,052 | | | | 2,858 | | | | 6.79 | % | | | 5,962 | | | | 5,521 | | | | 7.99 | % |
| Investment Management Services Income | | | 1,248 | | | | 1,220 | | | | 2.30 | % | | | 2,328 | | | | 2,221 | | | | 4.82 | % |
| Mortgage Banking Income | | | 856 | | | | 975 | | | | -12.21 | % | | | 1,592 | | | | 2,034 | | | | -21.73 | % |
| BOLI Income | | | 588 | | | | 467 | | | | 25.91 | % | | | 970 | | | | 930 | | | | 4.30 | % |
| Net Gain/(Loss) on Sale of Securities | | | — | | | | 1,956 | | | | -100.00 | % | | | 997 | | | | 2,203 | | | | -54.74 | % |
| Other Non-Interest Income | | | 713 | | | | 807 | | | | -11.65 | % | | | 1,863 | | | | 1,462 | | | | 27.43 | % |
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| |
| Total Non-Interest Income | | | 6,457 | | | | 8,283 | | | | -22.05 | % | | | 13,712 | | | | 14,371 | | | | -4.59 | % |
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NON-INTEREST EXPENSE | | | | | | | | | | | | | | | | | | | | | | | | |
| Salaries and Employee Benefits | | | 9,976 | | | | 10,246 | | | | -2.64 | % | | | 20,942 | | | | 20,615 | | | | 1.59 | % |
| Occupancy and Equipment Expenses | | | 2,209 | | | | 2,259 | | | | -2.21 | % | | | 4,497 | | | | 4,665 | | | | -3.60 | % |
| Data Processing & Facilities Management | | | 1,153 | | | | 1,147 | | | | 0.52 | % | | | 2,210 | | | | 2,205 | | | | 0.23 | % |
| Prepayment Penalty on Borrowings | | | — | | | | 1,941 | | | | -100.00 | % | | | — | | | | 1,941 | | | | -100.00 | % |
| Merger & Acquisition Expense | | | 221 | | | | — | | | | 100.00 | % | | | 221 | | | | — | | | | 100.00 | % |
| Other Non-Interest Expense | | | 5,332 | | | | 4,405 | | | | 21.04 | % | | | 9,986 | | | | 8,646 | | | | 15.50 | % |
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| Total Non-Interest Expense | | | 18,891 | | | | 19,998 | | | | -5.54 | % | | | 37,856 | | | | 38,072 | | | | -0.57 | % |
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| Minority Interest | | | — | | | | 1,083 | | | | -100.00 | % | | | 1,072 | | | | 2,173 | | | | -50.67 | % |
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| INCOME BEFORE INCOME TAXES | | | 9,791 | | | | 10,537 | | | | -7.08 | % | | | 19,699 | | | | 20,233 | | | | -2.64 | % |
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| PROVISION FOR INCOME TAXES | | | 3,170 | | | | 1,365 | | | | 132.23 | % | | | 6,378 | | | | 8,631 | | | | -26.10 | % |
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| NET INCOME | | $ | 6,621 | | | $ | 9,172 | | | | -27.81 | % | | | 13,321 | | | $ | 11,602 | | | | 14.82 | % |
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| BASIC EARNINGS PER SHARE | | $ | 0.45 | | | $ | 0.63 | | | | -28.57 | % | | $ | 0.91 | | | $ | 0.80 | | | | 13.75 | % |
| DILUTED EARNINGS PER SHARE | | $ | 0.45 | | | $ | 0.63 | | | | -28.57 | % | | $ | 0.90 | | | $ | 0.79 | | | | 13.92 | % |
| BASIC AVERAGE SHARES | | | 14,688,789 | | | | 14,525,868 | | | | 1.12 | % | | | 14,670,858 | | | | 14,510,396 | | | | 1.11 | % |
| DILUTED AVERAGE SHARES | | | 14,853,750 | | | | 14,668,934 | | | | 1.26 | % | | | 14,856,008 | | | | 14,662,530 | | | | 1.32 | % |
PERFORMANCE RATIOS: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net Interest Margin (FTE) | | | 3.84 | % | | | 4.47 | % | | | -14.09 | % | | | 3.99 | % | | | 4.49 | % | | | -11.14 | % |
| Return on Average Assets | | | 1.01 | % | | | 1.54 | % | | | -34.42 | % | | | 1.05 | % | | | 0.99 | % | | | 6.06 | % |
| Return on Average Equity | | | 15.00 | % | | | 22.39 | % | | | -33.01 | % | | | 15.08 | % | | | 14.14 | % | | | 6.65 | % |
INDEPENDENT BANK CORP.
SUPPLEMENTAL FINANCIAL INFORMATION
CONSOLIDATED AVERAGE BALANCE SHEETS AND AVERAGE RATE DATA
(Unaudited — Dollars in Thousands)
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| | | | | | | Three Months Ended June 30,
|
| | | | | | | 2004
| | 2003
|
| | | | | | | | | | | Interest | | | | | | | | | | Interest | | |
| | | Ending | | Average | | Earned/ | | Yield/ | | Average | | Earned/ | | Yield/ |
| | | Balance
| | Balance
| | Paid
| | Rate
| | Balance
| | Paid
| | Rate
|
Interest-earning Assets: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Federal Funds Sold and Assets Sold Under Resale Agreement | | $ | — | | | $ | — | | | | — | | | | — | | | $ | 20 | | | $ | — | | | | 0.00 | % |
| Trading Assets | | | 1,500 | | | | 1,530 | | | | 5 | | | | 1.31 | % | | | 1,083 | | | | 4 | | | | 1.48 | % |
| Taxable Investment Securities | | | 727,546 | | | | 719,125 | | | | 7,902 | | | | 4.40 | % | | | 645,299 | | | | 7,817 | | | | 4.85 | % |
| Non-taxable Investment Securities (1) | | | 63,137 | | | | 64,369 | | | | 1,069 | | | | 6.64 | % | | | 66,036 | | | | 1,142 | | | | 6.92 | % |
| Loans (1) | | | 1,696,381 | | | | 1,657,043 | | | | 23,620 | | | | 5.70 | % | | | 1,504,014 | | | | 24,231 | | | | 6.44 | % |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| |
Total Interest-Earning Assets | | $ | 2,488,564 | | | $ | 2,442,067 | | | | 32,596 | | | | 5.34 | % | | $ | 2,216,452 | | | $ | 33,194 | | | | 5.99 | % |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| |
| Cash and Due from Banks | | | 70,807 | | | | 67,175 | | | | | | | | | | | | 65,291 | | | | | | | | | |
| Other Assets | | | 119,734 | | | | 107,780 | | | | | | | | | | | | 101,245 | | | | | | | | | |
| | | |
| | | |
| | | | | | | | | | | |
| | | | | | | | | |
Total Assets | | $ | 2,679,105 | | | $ | 2,617,022 | | | | | | | | | | | $ | 2,382,988 | | | | | | | | | |
| | | |
| | | |
| | | | | | | | | | | |
| | | | | | | | | |
Interest-bearing Liabilities: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Savings and Interest Checking Accounts | | $ | 569,992 | | | $ | 542,451 | | | | 753 | | | | 0.56 | % | | $ | 469,294 | | | $ | 471 | | | | 0.40 | % |
| Money Market & Super Interest Checking Accounts | | | 475,690 | | | | 432,485 | | | | 1,255 | | | | 1.16 | % | | | 345,297 | | | | 1,050 | | | | 1.22 | % |
| Time Deposits | | | 466,258 | | | | 471,974 | | | | 2,582 | | | | 2.19 | % | | | 464,340 | | | | 2,928 | | | | 2.52 | % |
| Federal Funds Sold and Assets Purchased Under Resale Agreement | | | 50,422 | | | | 75,907 | | | | 207 | | | | 1.09 | % | | | 51,754 | | | | 126 | | | | 0.97 | % |
| Treasury Tax and Loan Notes | | | 2,838 | | | | 3,526 | | | | 4 | | | | 0.45 | % | | | 2,060 | | | | 2 | | | | 0.39 | % |
| Federal Home Loan Bank borrowings | | | 396,734 | | | | 388,976 | | | | 3,278 | | | | 3.37 | % | | | 392,492 | | | | 3,867 | | | | 3.94 | % |
| Junior Subordinated Debentures | | | 51,546 | | | | 51,546 | | | | 1,095 | | | | 8.50 | % | | | — | | | | — | | | | — | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| |
Total Interest-Bearing Liabilities | | $ | 2,013,480 | | | $ | 1,966,865 | | | | 9,174 | | | | 1.87 | % | | $ | 1,725,237 | | | $ | 8,444 | | | | 1.96 | % |
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| | | |
| | | |
| | | |
| | | |
| | | |
| |
| Demand Deposits | | | 475,399 | | | | 458,660 | | | | | | | | | | | | 417,306 | | | | | | | | | |
| |
| Company-Obligated Mandatorily Redeemable Securities of Subsidiary Holding Solely Parent Company Debentures of the Corporation | | | — | | | | — | | | | | | | | | | | | 47,804 | | | | | | | | | |
| Other Liabilities | | | 14,858 | | | | 14,879 | | | | | | | | | | | | 28,813 | | | | | | | | | |
| | | |
| | | |
| | | | | | | | | | | |
| | | | | | | | | |
| Total Liabilities | | $ | 2,503,737 | | | $ | 2,440,404 | | | | | | | | | | | $ | 2,219,160 | | | | | | | | | |
| Stockholders’ Equity | | | 175,368 | | | | 176,618 | | | | | | | | | | | | 163,828 | | | | | | | | | |
| | | |
| | | |
| | | | | | | | | | | |
| | �� | | | | | | | |
Total Liabilities and Stockholders’ Equity | | $ | 2,679,105 | | | $ | 2,617,022 | | | | | | | | | | | $ | 2,382,988 | | | | | | | | | |
| | | |
| | | |
| | | | | | | | | | | |
| | | | | | | | | |
| Net Interest Income | | | | | | | | | | $ | 23,422 | | | | | | | | | | | $ | 24,750 | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | |
| Interest Rate Spread (2) | | | | | | | | | | | | | | | 3.47 | % | | | | | | | | | | | 4.03 | % |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | |
| |
| Net Interest Margin (2) | | | | | | | | | | | | | | | 3.84 | % | | | | | | | | | | | 4.47 | % |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | |
| |
| (1) | | The total amount of adjustment to present interest income and yield on a fully tax-equivalent basis is $453 for the three months ended June 30, 2004 and $485 for the three months ended June 30, 2003. |
| |
| (2) | | Interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities. Net interest margin represents annualized net interest income as a percentage of average interest-earning assets. |
INDEPENDENT BANK CORP.
SUPPLEMENTAL FINANCIAL INFORMATION
CONSOLIDATED AVERAGE BALANCE SHEETS AND AVERAGE RATE DATA
(Unaudited — Dollars in Thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | Six Months Ended June 30,
|
| | | | | | | 2004
| | 2003
|
| | | | | | | | | | | Interest | | | | | | | | | | Interest | | |
| | | Ending | | Average | | Earned/ | | Yield/ | | Average | | Earned/ | | Yield/ |
| | | Balance
| | Balance
| | Paid
| | Rate
| | Balance
| | Paid
| | Rate
|
Interest-earning Assets: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Federal Funds Sold and Assets Sold Under Resale Agreement | | $ | — | | | $ | — | | | | — | | | | — | | | $ | 35 | | | $ | — | | | | 0.00 | % |
| Trading Assets | | | 1,500 | | | | 1,518 | | | | 19 | | | | 2.50 | % | | | 1,079 | | | | 18 | | | | 3.34 | % |
| Taxable Investment Securities | | | 727,546 | | | | 678,262 | | | | 14,937 | | | | 4.40 | % | | | 636,722 | | | | 15,517 | | | | 4.87 | % |
| Non-taxable Investment Securities (1) | | | 63,137 | | | | 65,592 | | | | 2,218 | | | | 6.76 | % | | | 61,423 | | | | 2,127 | | | | 6.93 | % |
| Loans (1) | | | 1,696,381 | | | | 1,629,941 | | | | 46,980 | | | | 5.76 | % | | | 1,476,292 | | | | 48,305 | | | | 6.54 | % |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| |
Total Interest-Earning Assets | | $ | 2,488,564 | | | $ | 2,375,313 | | | | 64,154 | | | | 5.40 | % | | $ | 2,175,551 | | | $ | 65,967 | | | | 6.06 | % |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| |
| Cash and Due from Banks | | | 70,807 | | | | 66,263 | | | | | | | | | | | | 63,874 | | | | | | | | | |
| Other Assets | | | 119,734 | | | | 105,921 | | | | | | | | | | | | 100,484 | | | | | | | | | |
| | | |
| | | |
| | | | | | | | | | | |
| | | | | | | | | |
Total Assets | | $ | 2,679,105 | | | $ | 2,547,497 | | | | | | | | | | | $ | 2,339,909 | | | | | | | | | |
| | | |
| | | |
| | | | | | | | | | | |
| | | | | | | | | |
Interest-bearing Liabilities: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Savings and Interest Checking Accounts | | $ | 569,992 | | | $ | 531,527 | | | | 1,440 | | | | 0.54 | % | | $ | 461,130 | | | $ | 983 | | | | 0.43 | % |
| Money Market & Super Interest Checking Accounts | | | 475,690 | | | | 399,424 | | | | 2,325 | | | | 1.16 | % | | | 338,984 | | | | 2,091 | | | | 1.23 | % |
| Time Deposits | | | 466,258 | | | | 470,578 | | | | 5,121 | | | | 2.18 | % | | | 466,401 | | | | 6,085 | | | | 2.61 | % |
| Federal Funds Sold and Assets Purchased Under Resale Agreement | | | 50,422 | | | | 59,703 | | | | 300 | | | | 1.00 | % | | | 53,785 | | | | 263 | | | | 0.98 | % |
| Treasury Tax and Loan Notes | | | 2,838 | | | | 3,682 | | | | 8 | | | | 0.43 | % | | | 2,258 | | | | 6 | | | | 0.53 | % |
| Federal Home Loan Bank borrowings | | | 396,734 | | | | 391,465 | | | | 6,511 | | | | 3.33 | % | | | 370,257 | | | | 7,677 | | | | 4.15 | % |
| Junior Subordinated Debentures | | | 51,546 | | | | 26,056 | | | | 1,107 | | | | 8.50 | % | | | — | | | | — | | | | — | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| |
Total Interest-Bearing Liabilities | | $ | 2,013,480 | | | $ | 1,882,435 | | | | 16,812 | | | | 1.79 | % | | $ | 1,692,815 | | | $ | 17,105 | | | | 2.02 | % |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| |
| Demand Deposits | | | 475,399 | | | | 448,063 | | | | | | | | | | | | 408,219 | | | | | | | | | |
| |
| Company-Obligated Mandatorily Redeemable Securities of Subsidiary Holding Solely Parent Company Debentures of the Corporation | | | — | | | | 23,668 | | | | | | | | | | | | 47,793 | | | | | | | | | |
| Other Liabilities | | | 14,858 | | | | 16,669 | | | | | | | | | | | | 26,952 | | | | | | | | | |
| | | |
| | | |
| | | | | | | | | | | |
| | | | | | | | | |
Total Liabilities | | $ | 2,503,737 | | | $ | 2,370,835 | | | | | | | | | | | $ | 2,175,779 | | | | | | | | | |
| Stockholders’ Equity | | | 175,368 | | | | 176,662 | | | | | | | | | | | | 164,130 | | | | | | | | | |
| | | |
| | | |
| | | | | | | | | | | |
| | | | | | | | | |
Total Liabilities and Stockholders’ Equity | | $ | 2,679,105 | | | $ | 2,547,497 | | | | | | | | | | | $ | 2,339,909 | | | | | | | | | |
| | | |
| | | |
| | | | | | | | | | | |
| | | | | | | | | |
| Net Interest Income | | | | | | | | | | $ | 47,342 | | | | | | | | | | | $ | 48,862 | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | |
| Interest Rate Spread (2) | | | | | | | | | | | | | | | 3.61 | % | | | | | | | | | | | 4.04 | % |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | |
| |
| Net Interest Margin (2) | | | | | | | | | | | | | | | 3.99 | % | | | | | | | | | | | 4.49 | % |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | |
| |
| (1) | | The total amount of adjustment to present interest income and yield on a fully tax-equivalent basis is $939 for the six months ended June 30, 2004 and $895 for the six months ended June 30, 2003. |
| |
| (2) | | Interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities. Net interest margin represents annualized net interest income as a percentage of average interest-earning assets. |
| | | | | | | | | |
| | | As Of
|
| | | June 30, | | December 31, |
| | | 2004
| | 2003
|
| Asset Quality |
| Non-performing Loans | | | 3,346 | | | | 3,514 | |
| Non-performing Assets | | | 3,346 | | | | 3,514 | |
| Net charge-offs (year to date) | | | 720 | | | | 1,645 | |
| Net charge-offs to average loans (annualized) | | | 0.09 | % | | | 0.11 | % |
| Loans 90 days past due & still accruing | | | 155 | | | | 156 | |
| Non-performing Loans/Gross Loans | | | 0.20 | % | | | 0.22 | % |
| Allowance for Loan Loss/Non-performing Loans | | | 715.21 | % | | | 659.16 | % |
| Loans/Total Deposits | | | 85.36 | % | | | 88.66 | % |
| Allowance for Loan Loss/Total Loans | | | 1.41 | % | | | 1.46 | % |
| |
Financial Ratios | | | | | | | | |
| Book Value per Share | | $ | 11.93 | | | $ | 11.75 | |
| Tangible Capital/Tangible Asset | | | 5.26 | % | | | 5.65 | % |
| Tangible Book Value per Share | | $ | 9.47 | | | $ | 9.27 | |
| Tangible Book Value per Share (proforma to include the deductibility of goodwill) | | $ | 10.33 | | | $ | 10.14 | |
| |
| Capital Adequacy |
| Tier one leverage capital ratio (1) | | | 7.45 | % | | | 7.60 | % |
| (1) | | Estimated number for June 30, 2004 |
